BlackEarth Minerals NL (ASX:BEM) has started a scoping study to assess the commercial viability of building a plant to process graphite fines from its Maniry Project in Madagascar into a battery anode material (BAM) suitable for use in lithium batteries.
This forms a key part of the company’s strategy to be a major graphite supplier to the lithium battery industry thus enabling it to capitalise on the emerging supply deficit for BAM.
The study will assess the viability of building a manufacturing plant in Europe to produce high-value spheronised and purified graphite (SPG) with European demand for BAM forecast to soar in coming years.
Becoming vertically integrated
BlackEarth managing director Tom Revy said: “We believe there is an exceptional opportunity to become a vital supplier to the lithium battery industry by processing Maniry fines into BAM.
“This would allow us to sell a portion of our fines for around four times the price we would realise by selling them as a raw product to others to process into BAM.
“By becoming vertically integrated in this manner, we stand to substantially increase our revenues, margins and free cashflow while becoming an integral part of the booming lithium battery industry in Europe.”
Vital battery component
Wave International, an independent resource development consulting group with specific expertise in graphite downstream processing, will undertake the scoping study for the potential downstream processing of suitable graphite concentrate in Europe.
SPG is considered a critical component in the lithium-ion battery supply chain and electric vehicle industry.
Previous tests by ANZAPLAN (Germany) found Maniry concentrate can be successfully spheronised and purified by industry-standard methodologies and that preliminary electrochemical testing indicated suitability for lithium-battery applications.
Adding value to Maniry fines
The BAM plant has potential to add significant value to Maniry fines, which will account for 40% of total production. Until now, BlackEarth had planned to sell the fines as a raw product to processors.
Preliminary studies show the BAM will sell for ~US$3,500 per tonne compared with ~US$850 for the concentrate fines.
Commodity forecasters predict there will be a growing supply shortfall in the BAM market from next year due to soaring demand from lithium battery manufacturers.
“Income diversity”
“The BAM strategy is designed to provide valuable income diversity and increased overall financial returns from Maniry,” Revy said.
“At the same time, we will proceed as planned with our strategy to process our coarse graphite via our joint venture in India for sale of expandable graphite into Europe next year.”
In its role as study manager of the study, Wave International will evaluate the viability of building a downstream processing facility in Europe to produce (uncoated) spheronised purified graphite from a portion of the graphite concentrate expected to be produced from Maniry Graphite Project in Madagascar.
A flow sheet will consider mechanical shaping (micronisation/spheronisation) followed by purification.
The basis of the purification options will be the ANZAPLAN test-work that achieved a minimum 99.96% fixed carbon using a number of different purification methods.
Sites in Europe
A number of sites in Europe are being considered, with BlackEarth executives having carried out site visits in the past fortnight.
The company’s initial assessments indicate the strategic advantages of a plant in Europe include:
- proximity to a global hub of new battery giga-factories and electric vehicle producers;
- infrastructure availability including water, power, key logistic routes;
- access to critical consumables and experienced personnel; and
- attractive financial incentives to encourage battery-related developments.
Meanwhile, a definitive feasibility study (DFS) for the Maniry Project is set for completion in October 2022.